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House Panel Considers Waiving Rule That Makes Tax Hikes Harder

(Bloomberg) -- A House panel that’s in charge of preparing the “Tax Cuts and Jobs Act’’ for a floor vote Thursday was poised to begin by waiving a rule that’s designed to make it harder to increase taxes.

While the issue made for an awkward moment or two for House leaders, who’ve said their legislation would provide broad tax cuts at all income levels, it wasn’t expected to slow down the bill.

The House Rules Committee was meeting Tuesday night to consider rules for how the full House will consider the tax-overhaul bill that would provide rate cuts for corporations, partnerships and most individuals -- including whether floor amendments would be allowed. As part of that process, the panel proposed waiving an existing House rule that requires a 3/5 majority vote for any bill that raises taxes.

While the House tax bill provides across-the-board rate cuts that would apply to all income groups, it would shift tax brackets and eliminate or limit some deductions and other breaks, resulting in potential tax increases in some individual cases, analysts have found. Nonetheless, the provision to waive the 3/5 rule is merely intended as a “protection’’ for the House bill against any narrow attempts to derail it, said Caroline Boothe, communications director for Rules Committee chairman Pete Sessions.

A letter from Congress’s Joint Committee on Taxation said the tax liability for individuals who choose to itemize their deductions will vary greatly and “it is not possible to say in all cases that these taxpayers have lower total income tax liability.”

A previous JCT study estimated that the bill would reduce federal revenue by more than $1.4 trillion over 10 years, before accounting for any economic growth it might prompt.